Modi’s Three Big Gambles

(Sadanand Dhume)

We’ll soon know if demonetisation, GST and Adityanath damaged BJP’s re-election prospects, says Dhume in an article written in Times of India

Measured by their riskiness, three decisions in the prime minister’s tenure thus far stand out. Should BJP lose next year’s general election – an unlikely but increasingly plausible outcome – pundits and politicians alike will pore over the impact of demonetisation, the nationwide goods and services tax, and last year’s surprise elevation of Yogi Adityanath to lead Uttar Pradesh.

On the face of it, the three moves are hardly alike. Demonetisation and GST are economic policies of widely varying pedigree: the former a harebrained idea cooked up by cranks, the latter a product of broad technocratic consensus. The appointment of Adityanath to helm India’s largest state is ultimately a political gambit.

Nonetheless, all three decisions share one thing in common: impact. You may jeer at them as foolhardy or praise them as visionary, but if you’re in India and have a pulse the odds that you’re unaware of them are vanishingly slim. In political terms, they are high stake bets that have the potential to pay off for Modi in comfortable re-election, but equally to backfire in flaming defeat.

Ranked in order of foolishness, demonetisation, the 2016 decision to suddenly vapourise nearly 90% of India’s cash by value, has to come first. Arguably, no policy in the past 25 years has been as poorly conceived or clumsily implemented. Nor has any single act done more to damage Modi’s hard-won reputation as a safe steward of the economy.

Like demonetisation, last year’s anointment of Hindu monk Yogi Adityanath as chief minister of the country’s most populous state came as a bolt from the blue. Nobody doubted the five-term parliamentarian’s electoral appeal in the badlands of eastern Uttar Pradesh. But his incendiary speeches targeting Muslims and reputation for violence, including the standing up of a private militia, the Hindu Yuva Vahini, appeared to place Adityanath beyond the pale of high office.

The final gamble, the goods and services tax rolled out last year, is much more of a mixed bag. Many economists believe that on the whole the benefits of knitting India into a single market outweigh the teething troubles associated with the new tax.

Will Modi’s gambles backfire? For now they have clearly given the opposition ammunition that it otherwise lacked.